The canard that Social Security was meant to be a self-funding insurance program is part of what Voegeli describes as the Left’s incessant refusal to argue for good-faith welfare programs — i.e., to make the very argument I suggested in my column for straightforward, transparent welfare. Were the Left to make that argument, Voegeli says, it would sound like this:
The welfare state is good and necessary. The taxes it requires are not fun to pay, but they fund programs that improve the quality of life for everyone by strengthening and uniting our nation. We should accept and even embrace those taxes as a fair price we pay for the essential benefits they buy.
Why won’t the Left make this case? Voegeli provides the answer:
Liberals have avoided this argument in favor of any and every alternative they can find. They have made this choice out of fear that voters’ enthusiasm for welfare state programs will never be sufficient to win their support for the taxes to pay for them. Rather, liberals have tried to establish an adequate political foundation for the welfare state by indulging the voters’ wish that someone or something other than they themselves will pay for its programs.
Foremost among the classic deceptions the Left has used to garner political support is the ludicrous assurance that, as Voegeli frames it, “welfare state programs will pay for themselves. . . . Voters, therefore, needn’t worry their pretty little heads about the price tags.” That’s the legerdemain of packaging Social Security as “insurance.” Pulling off such a con job becomes much easier when commentators like Radosh continue to credit what Voegeli tartly calls the Left’s “non-Euclidian economics” — long after the fraud is manifest, and even as the country sinks deeper into an ocean of red ink.
Social Security’s illusion of insurance papered over what, for progressives, was the inconvenient fact that worker “contributions” were actually a regressive tax that charged the same fixed amount to the lowest-wage worker and the millionaire. As Mark Levin notes, Roosevelt was emphatic that these taxes had nothing to do with the program’s economic viability or lack thereof. They were, FDR said, “politics all the way through,” enacted “to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits.” Even if the numbers did not add up, the universal sense of entitlement fostered by framing assessments as contributions rather than taxes assured that “no damn politician can ever scrap my Social Security program,” as FDR presciently put it. Mark adds Milton Friedman’s explanation that presenting Social Security as insurance was a “fiction” preserved by the “accounting sleight-of-hand of a bogus trust fund.”
Though Radosh is still peddling the “insurance” Kool-Aid, the Roosevelt Justice Department was forced to abandon it 76 years ago, when the constitutionality of this government-mandated “insurance” program was challenged. Social Security did not really involve insurance contributions, FDR’s lawyers told the Supreme Court; they were just taxes like any other paid into the treasury generally — “The tax moneys are not earmarked, and . . . Congress is at liberty to spend them as it will.” It was on that representation — not on the Radosh portrayal of “funds taken from [workers’] own paychecks” earmarked for their retirement — that the justices upheld the program in Helvering v. Davis.
You’ll notice the eerie similarity to Obamacare: the nation gulled into believing an ambitious welfare program was constitutionally suspect insurance regulation, only to have the Supreme Court sustain it as taxation — despite the president’s contrary insistence. Still, the yarn of Social Security as “insurance” endures, inexorably inviting politicians to expand “insurance coverage” categories, and hiding the true cost of the program, which worker “contributions” cannot cover.
The true nature of Social Security also had to be hidden because New Dealers knew it was only one component of a transformative progressive vision. For example, as I’ve previously observed, FDR’s Committee on Economic Security initially contemplated conjoining Social Security to a health-insurance plan along the lines of what eventually became Medicare — which itself was a Trojan Horse whose proponents wanted universal compulsory socialized medicine. Health insurance was disaggregated from the package deal because of FDR’s fear that the resulting wrath of the public and the medical profession would imperil passage of Social Security. But Roosevelt got right back to it the day after he signed the Social Security Act, directing the new Social Security Board to study the “related” area of health insurance.
Ultimately, FDR outlined the Left’s comprehensive agenda in his 1944 inaugural. It was — and it remains today, in the redistributionist age of Obama — the “second Bill of Rights,” so well described by Jonah Goldberg in Liberal Fascism: the central government as guarantor of “a useful and remunerative job,” “a decent home,” “adequate medical care and the opportunity to achieve and enjoy good health,” “adequate protection from the economic fears of old age, sickness, accident, and unemployment,” and “a good education.” Of course, to refer to this as a “bill of rights” was, and is, a perversion. The object of the original Bill of Rights was to protect the citizen from government overreach; FDR’s aim was to enable government overreach — to empower Washington to confiscate the citizen’s property and redistribute it as the feds saw fit.